- By the end of last week's trading, the month, and the first quarter, the price of the euro fell against the major currencies.
- Despite a strong start to the year, the euro has come under pressure in recent sessions as investors sought the safe haven of the US dollar amid US and European banking turmoil and global recession fears.
- Inflation was also at the forefront of the euro's trading on Friday, with levels touching all-time highs.
The price of the euro fell against the dollar, EUR/USD, to the level of 1.0836, which closed trading stable near it, after gains from last week, which affected the 1.0926 resistance level.
On the economic side, according to EUROSTAT, the annual inflation rate fell to 6.9% in March, down from 8.5% in February. It was also below the market estimate of 7.1%. Core inflation, which excludes the volatile food and energy sectors, rose to 5.7% year-on-year this month. On a monthly basis, the inflation rate rose 0.9% from 0.8% in February. Earlier this week, the Eurozone showed mixed economic data, with economic sentiment weakening to 99.3. Industry and service sentiment fell to -0.2 and 9.4, respectively. Consumer confidence fell to -19.2, while consumer inflation expectations also jumped.
The European unemployment rate remained unchanged at 6.6%.
Meanwhile, the US Federal Reserve's inflation favorite eased in February. The personal consumption expenditures (PCE) price index slowed to 5% year-on-year in February, while the core PCE price index fell to 4.6%. On a monthly basis, both the PCE index and the core PCE increased by 0.3%, respectively. Accordingly, the euro ended the week up by 0.94% against the dollar. The currency also gained 2.14% for the month of March and jumped 1.49% in the first quarter.
From the USA, Initial Jobless Claims for the week ending March 24th exceeded the expected claims count at 196K with a tally slightly above 198K. US Annual GDP for the fourth quarter missed expectations by 2.7% with a change of 2.6%, while the quarterly equivalent was in line with expectations at 3.9%. Core PCE for the fourth quarter exceeded the expected change (QoQ) of 4.3% with a change of 4.4%, while core PCE prices were in line with the estimate of 3.7%.
EUR/USD Technical Outlook:
In the near term, according to the performance of the hourly chart, it appears that the EUR/USD is trading within the formation of an ascending channel. This indicates a strong short-term bullish bias in market sentiment. Therefore, the bulls will be looking to extend the current rally towards 1.0926 or higher to the resistance at 1.0948. On the other hand, the bears - bears - will be looking to pounce on pullbacks around 1.0883 or below at 1.0861 support.
In the near term, and according to the performance on the daily chart, it appears that the EUR/USD is trading within the formation of an ascending channel. This indicates a significant long-term bullish bias in market sentiment. Therefore, the bulls will target long-term profits around 1.0986 or higher at the resistance of 1.1065. On the other hand, the bears - the bears - will be looking to pounce on profits at around 1.0819 or below at the support at 1.0732.
Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.